british gp

Silverstone could lose F1 race after 2019

What has been a developing story over the last few weeks will come to a head next week, and the consensus is that British Grand Prix organisers want out of their contract. Under the current agreement hosting fees for the race at Silverstone, although modest compared to some other events, have been increasing by 5% annually.

Key to the arrangement has been the fact that Silverstone is owned and operated by the British Racing Drivers' Club (BRDC), which is an independent enterprise with no government backing.

BBC's Andrew Benson breaks down the numbers:

The current contract - signed at the end of a tedious few years of speculation and machinations concerning the future of the race - was for £12m in the first year, 2010. But it has a 5% annual escalator in it. So this year, the race is costing £16.9m. By 2019, it will be £18.6m, and by 2027, the final year of the deal if it were to run its course, £27.5m.

These numbers are massively less than some circuits are paying - for example, Bahrain pays at least $40m (£31m) a year; Russia $50m (£38.7m); Azerbaijan a reputed $75m (£58m).

But those races all have one thing in common - they are funded by authoritarian governments keen to promote their country to the world. Silverstone is a private members' club that has to run a viable business.

To undercharge, and even worse to renegotiate existing contracts, would leave the sport's new owners in a difficult spot and could lead to every race organiser insisting their fees to reduced. 

If not Silverstone, then where?

With Liberty Media and FOM looking to increase the number of races on the calendar, it's clear from the Silverstone deal that they'd rather create new events in destination cities rather than renegotiate ones that aren't working.

Having indicated that they'd prefer more street circuits, London becomes the obvious substitute for a British Grand Prix. This comes with it's own challenges, but if Formula E can do it, why not F1?

Alternate locations in the UK include former GP circuit Brands Hatch which shared the British Grand Prix with Silverstone in alternating years through the 60s, 70s and into the 80s before Silverstone became the permanent home of the race in 1987. It seems though that they are not equipped, nor can they afford to host an F1 race either.

Whatever the outcome, Liberty Media certainly want a race in Britain to maintain their core fanbase. Although the BRDC are desperate for the race to continue at Silverstone, they can't continue if the costs lead them to ruin. 

Will FOM take control of the British GP themselves?

Short-term relief could come from FOM directly, with an offer on the table to take over running of the race at Silverstone for five years to keep it running while a solution is found.

From Alan Baldwin writing for Reuters:

A source close to the commercial rights holder said Formula One Management had offered to take over the race for five years, absorbing annual losses of between two and three million pounds ($2.5-$3.8 million).

The offer, and another to delay the deadline to the end of the month to allow more time for negotiation, had proved insufficient.

Perhaps BRDC are playing hardball with the new owners now rather than taking long-term pain. Even if they get a reprieve until 2026, it would be left with an event that will cost up to £26 million by the end of their contract, far beyond their means.

It's hard to see exactly how Silverstone can continue hosting the race as things stand, but stranger things have happened. If the sport can attract new owners, teams and even race organisers, perhaps investors in the track can be found.